Digital Trends: Removing Friction in the Member Experience

November 19, 2024

By Brian Day, Sales Solutions Consultant, Velera

As we move forward into a more digital economy, technology continues to shape the landscape of the credit union industry. Digital banking has forever changed consumer expectations, and it’s changed how credit unions need to respond. The good news is that technology can support a better, more convenient member experience — and, at the same time, help financial institutions save on costs as they reallocate funds from branches to tech development.

Here are four digital trends that are impacting the credit union market today — and will likely continue to develop in the future.

Trend 1: Personalization and Recommendations from Consumer Data

With the power of data, credit unions can understand what a member has done in the past and, based on that behavior, reasonably predict what they might do in the future. That’s a valuable resource for personalizing messages with recommendations to help members improve their financial situation, avoid overdrafts and more.

We see this on sites like Amazon and Netflix, both of which recommend products or shows based on what you’ve already purchased or watched. In the financial services industry, too, customers increasingly demand personalized experiences, especially younger consumers who are willing to share data to receive more relevant messaging.

We also see this type of personalization on home/mobile banking account pages as pop-up offers — perhaps a consumer is making purchases that indicate they’re traveling soon, so the offers center on suggestions for how to make that travel experience smoother and more seamless.

For credit unions, however, personalization could be even more credible, because members already recognize them as a partner, having their best interests top of mind. With the power of data, we are moving toward an even more comprehensive experience to deliver targeted messages based on a member’s unique financial situation.

• Today, many online banking platforms display a user’s credit score on their account page, along with education on how the score is calculated; as their trusted financial partner, credit unions should offer specific, personalized recommendations for improvement.
• Technology exists to analyze the frequency and amount of a member’s paycheck; based on spending patterns, credit unions can offer recommendations to avoid a future overdraft situation.
• Using data, if we detect that a member’s savings balance isn’t growing, we can make suggestions for changes to spending that create more funds for savings.

Trend 2: Financial Education Becoming Central to the Digital Experience

Another top digital trend is financial education, which is increasingly crucial in today’s consumer environment. Prices for groceries and housing are increasing, while rates for borrowing and inflation are elevated across every sector. Wages have not kept pace as more and more consumers are living paycheck to paycheck. Financial education can help consumers better understand their financial position and give them the necessary skills to improve.

While financial education can sometimes feel a bit cold, technology can make that a better and more engaging experience. Visualization tools can clearly illustrate a member’s current financial situation, track their progress and show them the steps needed to improve.

• A starting point is critical, and we’re seeing that reflected by an increased use of online calculators to show how small actions can make a difference in a consumer’s financial situation.
• To track progress, many financial institutions offer budgeting tools, transaction categorization and links to pull in external accounts — all critically important to help members understand their holistic financial picture.
• Members need help understanding how to improve and how to be more financially secure. It’s beneficial to connect them to online education that can be customized for their unique situation.

Trend 3: Constantly Analyze and Improve the User Experience​

Our third trend is the global drive to improve the consumer experience. In the credit union world, we’re seeing constant updates aimed at removing barriers to accessing and using members’ accounts.

For example, the key reason members use their banking app is to check their balance, so let’s look at how we can make that easier. Currently, for a member to check the balance on their account, the member must:

• Pick up their phone
• Unlock it
• Find the mobile banking application
• Log in
• Select the account — checking, savings, credit, etc.

That’s a lot of steps! To create the best possible member experience, we must find ways to streamline the process. What can we eliminate?

Capital One uses widgets to display an account’s balance before the user even logs in — they just pick up their phone, unlock it and see the widget with their account balance front and center. That’s a process cut by 50 percent!

Another example is the use of a customizable Quick Actions section. Perhaps you’re commonly transferring money between accounts, so instead of scrolling through all the available actions, you can simply add Transfers to your Quick Actions. Someone else might commonly send money through Zelle, so in that case, they would have Zelle as a Quick Action — again, reducing the steps in the process for a better member experience.

Trend 4: More Robust Help and Search​

Another trend impacting credit unions is improvements to Help and Search functions in online banking. This is a big area of opportunity for credit unions, giving members the power to solve problems completely online, often quicker and easier than picking up the phone and talking to an agent.

Today, the Help button can be hard to find, and the Search function doesn’t always deliver responses within the context of what the member is doing. The trend now is to make Help and Search more contextual. If a member is in Zelle and they access Help, they should be provided with support information about Zelle.

Wells Fargo is addressing this with a segment-leading chatbot named Fargo, which now offers personal financial management (PFM) tools directly within the Help interface. Customers access Fargo via a prominently displayed red alert tagged to the Ask Fargo tab at the top of the banking app, reinforcing Wells Fargo’s emphasis on the chatbot as the “front line” of digital customer service.

Some bots can take in information, provide contextual responses and then pivot if the consumer asks something else. AI technologies can revolutionize Help and Search for a more humanized interaction — and a better experience overall.

Conclusion: Set a Course for Your Own Digital Future

Overall, digital trends in the financial industry are moving toward removing friction in the consumer experience. The sticking point for credit unions, however, is the constant rate of change; to remain competitive, credit unions must keep up with ever-evolving member expectations.

A digital consultant could help your credit union understand your member experience today, then identify ways to improve by integrating key tech features such as personal financial management, chatbots, account opening, credit score modules, financial education and analytics. Once you’ve determined the vision for your new member experience, you can begin figuring out how to get there. This can be daunting, but a fintech CUSO, like Velera, can do the heavy lifting of product research and development and help you set a course for your own digital future.

To learn more about Velera and the solutions they offer, connect with the GoWest Solutions Team today.

About the Author: As a solutions consultant, Brian Day helps Velera (formerly PSCU/Co-op Solutions) clients understand industry trends and product solutions, with a focus on digital solutions. He has worked in various roles at Velera, focused on innovation, product development and client consulting. Prior to working in financial services, Brian held product support roles focused on market analysis, market research and forecasting for organizations in the manufacturing sector. He earned a bachelor’s degree from the University of Northern Iowa. 

Posted in GoWest Solutions, Top Headlines.